Genius Childcare currently operates five centres in the ACT (this one in Symonston was taken over by a new provider earlier this month). Photo: James Coleman.
A Canberra ‘mum-and-dad’ company is among a group of creditors owed well over $10 million by a failed national childcare provider – but they’re not holding out hope they’ll ever see the money again.
Genius Childcare has been beset with educator walk-outs and sudden centre closures across the country over the past year, ending up as the focus of an ABC Four Corners investigation earlier this week.
In the past year alone, the ACT’s childcare regulator, Children’s Education and Care Assurance (CECA), has received 35 complaints, incident reports or statuary notifications about the ACT’s Genuis-run centres.
Gungahlin racked up the most at 11, followed by eight at Gowrie, seven at Symonston, six at Condor and three at Bonython.
This week, Genius has been forced into administration starting on Monday (17 March) with one of its subsidiaries, Vertical 4 Pty Ltd, affecting 13 centres across the country.
This was followed on Wednesday by its second subsidiary, Abacus 49 Pty Ltd, taking the total number of childcare centres under administration to 25.
Nicholas Charlwood, Alan Walker and Glenn Livingstone from Sydney-based WLP Restructuring are the administrators for both companies, and they say business will continue “as usual” at the centres while the financial affairs are “urgently” assessed.
“The administrators’ intention is to commence the process to sell or recapitalise the entity,” they said in a statement.
“All … centres will remain open, with the administrators taking over the centre operations.”
All centres will remain operational during the administration process. Photo: Divya Mahajan.
It’s understood there are agreements in place to immediately sell five of the centres, including Genius Childcare Gowrie.
Administrators haven’t revealed the total outstanding debt, but the Australian Taxation Office (ATO) is owed $10.34 million by Vertical 4 alone.
The United Workers Union (UWU) is also suing Genius over an alleged unpaid superannuation bill amounting to $7 million.
Staff members from across the country have also reported two to four weeks’ worth of outstanding wages on top of other unpaid entitlements.
Right Tick Recruitment, founded by Ranjan Agarwal and his wife Sheetl Agarwal in 2018, provided casual educators across Canberra’s Genius centres.
While the workers have all been paid, the company is chasing $41,847 across 10 unpaid invoices, with each invoice including up to 10 shifts.
Mr Agarwal previously offered payment plans to Genius, asking them to pay 15 per cent upfront and then $5000 a week thereafter, followed by a final offer “where I take $7000 off it and they just pay $35,000 to settle the whole thing”.
He says he received “nothing” but empty promises in return.
The couple has yet to hear anything from the administrators, but with banks as the first creditors, Mr Agarwal isn’t “expecting anything”.
“We’ll survive,” he says.
“Luckily, we stopped [providing educators] after two months. If we’d have gone for any longer, there’d be a bit of trouble, but yeah, it’s still a big hit for a small company like ours.”
Despite threats, staff would forfeit leave payments by transferring to Bright Buds, and almost all have stayed. Photo: Divya Mahajan.
Earlier this month, a new provider – Bright Buds Early Learning – took over the Genius centre in Symonston after the site’s landlord terminated the lease over more than $28,000 in unpaid rent.
Bright Buds currently runs three other centres across Canberra, including in Belconnen, Gungahlin and Tuggeranong.
Centre director Divya Mahajan says despite Genius’s threats to withhold leave payments from staff who transferred to Bright Buds, all but two have remained.
“One moved to Brisbane, and another went to Gowrie because she had a lot of annual leave saved up,” she says.
Ms Mahajan says they’re also yet to hear from the administrators, but says the news comes as somewhat a relief.
“It means the staff are going to get all their entitlements, basically. That’s what we’re hoping.”
Bright Buds committed to paying staff more than Genius, and in an effort to attract families back to the centre, has slashed its daily fee from $177 to $145 “to make childcare more affordable”.
WLP Restructuring was contacted for further comment. Genius Childcare has not replied to repeated requests for comment.
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